Identifying a real benefit

Identification cards will allow more people to participate in the economy.

In trying to help New Yorkers it considers disadvantaged, the City Council often ignores the impact its legislation has on businesses. But it recently passed a bill that should help both constituencies.

The council directed the city to issue municipal identification cards, offering all city immigrants the opportunity to get something Americans take for granted: government-issued IDs, which are used all the time to do such things as open a bank account, sign a lease, register for a class, get a permit, take a flight or just enter an office building. New Yorkers without them face obstacles to tasks both important and mundane.

The new ID cards promise to allow these folks, notably the several hundred thousand here illegally, to more actively participate in the economy. That would boost business and tax revenue, as more immigrants get federal tax ID numbers and work on the books. Some will even take out bank loans and launch businesses.

There's no guarantee that the legislation—which Mayor Bill de Blasio has promised to sign—will deliver on its potential. Much depends on how broadly the new IDs are accepted. It is our hope that they will be welcomed rather than treated as an excuse to turn someone away—or worse, to turn someone in. If people here illegally are the only ones who obtain municipal IDs, the cards will be seen as a proverbial scarlet letter.

To that end, city government and the business community must encourage New Yorkers of all stripes to get the new ID cards. Promotions such as discounts for merchandise and admission to cultural institutions are one way to do that. Beyond offering benefits for shopping and entertainment, the cards could gain cultural cachet, branding bearers as residents of the world's greatest city. We'd like to see support for the IDs from the city's industries and endorsements from resident celebrities.

State and federal banking regulators will also play a role. If officials such as state Financial Services Superintendent Benjamin Lawsky urge financial institutions to accept the IDs, more immigrants would open bank accounts rather than rely on check-cashing establishments or shadowy operators whose high fees make it difficult for customers to accumulate savings. Banks' concerns about money laundering and other fraud must be addressed, but we suspect those fears are overblown.

Municipal IDs have succeeded in other cities, but the potential gain is greatest in our immigrant-heavy, entrepreneur-oriented metropolis. Business and government together can make it work.

A version of this article appears in the 2010707, print issue of Crain's New York Business.